G20 summit: London calling

Gordon Brown often looks happier playing chancellor to the world rather than prime minister of the UK. Yesterday's G20 summit showed why that can sometimes be a good thing. There was Mr Brown hosting world leaders, addressing the international press corps on the global economy and unveiling a complex package of aid - and he was entirely in his element. Even the venue, an east London conference hall better known for hosting boat shows, seemed very Brownian. Tony Blair, one suspected, would have gone for rather more razzmatazz.

Much had been said about this conference in the months beforehand. Expectations had been first raised (most notably by Downing Street) and then sharply lowered (by a continental tag team of Nicolas Sarkozy and Angela Merkel). In the end, what we got was not a "new Bretton Woods" (Mr Brown speaking last October), nor a "global new deal" (Mr Brown just this February). But it was still big: $1.1 trillion of aid to middle- and low-income countries. True, this was charity on the cheap, an international whip-round of pledges and loans, rather than cash upfront. But when hard times come, charity normally goes to the wall. Instead, the rich and newly rich countries recognise that, however bad their situation, the frontline of this crisis is in eastern Europe and those other economies that have only just begun to open up to foreign money. And amid a crisis that bears some comparison to the Depression, this package provides hope that 1930s-style isolationism will not be revived.

Yet while the G20 summit did not descend into beggar-my-neighbour economics, neither did it live up to the prime minister's claim that it was "the day the world came together". If ever there was a time for joint action, this was it. The short-term future of the world economy is blighted by two common problems: a nasty global recession and an unprecedented banking crisis. The message from the G20 was that countries have to tackle both problems on their own. So there will be no joint plan to clear the banking system of those toxic assets. And those US and UK calls for a joint stimulus package were firmly rebutted by Germany and France, leaving leaders merely to reiterate a commitment to do "whatever it takes".

Given the red lines and frantic briefings, that no-score draw was not a surprise. More startling was a lack of progress on the long-term project to reform capitalism, where a conference of the most important economies could have made real headway. Yet the European push for more financial regulation was hardly a wild success. Yes, there were some good lines on greater international oversight of financiers and extending the regulatory net to cover hedge funds. But amid a financial crisis that has shown up the utter inadequacy of the regulatory system and aroused the sort of anger displayed in this week's protests, there was plenty of room to go further. The masters of the universe on Wall Street and in the City will doubtless look at these resolutions and breathe a sigh of relief. And while the G20 was happy to give the IMF a fat chequebook, it was far too vague on reform of an institution that has rightly spent much of this decade in the doghouse. Most importantly of all, this economic crisis comes amid an even more important environmental one, and yet the communiqué treated the green agenda as if it was merely motherhood and apple pie, to be supplicated with a few mentions.

This is not to dismiss the very real achievements of this week's meetings, but merely to point out ways the next summit must go further. Because one crucial outcome of this week is that the G20 is now the world's number-one decision-making forum, the place where serious horse trading can happen and lead to results. It has superseded the mainly white rich nations' club of the G7. The G20 may not be a perfect group, but its ascent marks a new chapter in the era of capitalist globalisation.